Eataly spawns miracle on West 23rd Street

The Shake Shack in Madison Square is part of the foodie scene along East 23rd Street

Fed by the resounding success of Italian restaurant/superstore Eataly, the area around its West 23rd Street home is experiencing a foodie invasion.

Schnipper's Quality Kitchen, a self-serve diner which opened at the base of the new New York Times Building on Eighth Avenue and West 41st Street last year, recently signed on for 4,800 square feet on the far side of Madison Square at 1 Madison Ave. In addition, a new wine bar and charcuterie called Gustavo America leased nearly 3,600 square feet at the same address, filling retail space that had been vacant for more than five years. Both are expected to open for business in 2011.

Brokers attribute the deals to Mario Batali's thriving Eataly, which opened at 200 Fifth Ave., at West 23rd Street, in August. The market, boasting everything Italian—from fresh mozzarella, pizza and pasta to a crudo bar—has served as a boon for a street once begging for tenants. Rents have even increased, thanks to the celebrity chef's new concept.

“Eataly added probably 15% to rents within a block or two,” said Ariel Schuster, the Robert K. Futterman & Associates broker who, along with colleagues Greg Covey and Izzy Anthony, represented the landlord in both deals at 1 Madison. He noted that the deals closed near the asking rent of $85 a square foot. “People saw the crowds at Eataly,” he said. “It had a clear impact.”

Even co-owner Mr. Batali can't deny his project's influence on the neighborhood. The chef said that retail rents in the neighborhood have risen so much that he wishes he'd rented everything nearby, in order to make a profit.

“If I was smart, we would have rented all the retail space in the neighborhood,” he said.

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